If you want to build wealth faster, one of the smartest moves you can make is to use tax-advantaged accounts. These accounts give you special tax benefits that help your money grow more efficiently over time. You keep more of what you earn instead of handing it to the IRS.

Here's how they work and how to make the most of them.

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1. Understand what "tax-advantaged" means

A tax-advantaged account is any account that offers a tax break either now or later. The idea is simple: the less you pay in taxes, the more of your money stays invested and compounding.

There are three main types:

• Tax-deferred accounts, where you pay taxes later (like a traditional 401(k) or IRA).
• Tax-free growth accounts, where you pay taxes now but not when you withdraw (like a Roth IRA).
• Tax-deductible or special-purpose accounts, which give you specific benefits for certain goals (like HSAs or 529 plans).

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2. Max out your 401(k) or 403(b)

If your employer offers a retirement plan, it's usually the best place to start. Contributions are taken from your paycheck before taxes, reducing your taxable income right away.

Many employers match part of your contribution. That's free money. If your company matches 50 percent up to 6 percent of your salary, make sure you contribute at least 6 percent to get the full match.

The money inside your 401(k) grows tax-deferred until you retire. You'll pay taxes later when you withdraw it, ideally at a lower tax rate.

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3. Open an IRA

An Individual Retirement Account (IRA) is your next best tool. You can open one on your own, even if your job doesn't offer a retirement plan.

There are two main types:

• Traditional IRA: Contributions may be tax-deductible now, and you pay taxes when you withdraw later.
• Roth IRA: You pay taxes now, but your money grows tax-free, and you owe nothing in retirement.

If you expect to be in a higher tax bracket later, a Roth IRA often makes more sense.

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4. Use an HSA if you qualify

A Health Savings Account (HSA) is one of the most powerful tools for building wealth. You can only open one if you have a high-deductible health insurance plan.

It has triple tax advantages:

• Contributions are tax-deductible.
• Growth and interest are tax-free.
• Withdrawals for qualified medical expenses are also tax-free.

If you can afford to pay medical bills out of pocket now, let your HSA money grow untouched. In retirement, you can even use it for non-medical expenses (you'll just pay regular income tax then).

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5. Consider a 529 plan for education

If you have kids or plan to go back to school, a 529 plan helps you save for education with tax benefits. The money grows tax-free, and withdrawals for qualified education expenses are tax-free too.

Some states also offer tax deductions for contributions, so check your local rules.

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6. Automate contributions

Set up automatic transfers to your accounts every payday. Regular investing builds discipline and helps you stay consistent. Even small contributions add up when they grow tax-free or tax-deferred for decades.

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7. Don't ignore the power of compounding

The real magic happens over time. When you invest inside tax-advantaged accounts, your returns aren't reduced by yearly taxes on dividends or capital gains. This lets your money snowball much faster than in a regular account.

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8. Prioritize the right order

A good general rule:

1. Contribute enough to your 401(k) to get the employer match.
2. Max out your IRA or Roth IRA.
3. Add more to your 401(k) or HSA if possible.
4. Use a taxable brokerage account for any extra investing.

This approach gives you the biggest tax advantages first.

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Bottom line

Tax-advantaged accounts are the legal cheat code for growing wealth. They reduce your taxes, boost your investment returns, and protect your future.

Start using them early, automate your contributions, and let time and compound growth do the heavy lifting. Your future self will thank you.